Punjab IT Policy

8/3/2019 Punjab IT Policy

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IT & IT Enabled Services, Electronics Industry, Knowledge Parks & Biotechnology

1. 1. Background:1.1 Information Technology (IT)

1.1.1 Government of Punjab has been working on various initiatives to attract

investments in Information Technology (IT) and Electronics Industry. In 80s, Mohali

developed a niche for electronics and telecommunication Industry. Semiconductors

Complex Limited, Punwire, Punjab Communication Limited (PUNCOM), Fujitsu India

Limited, ESPL etc. were established during the same period. In its IT Policy, 2001,

Government of Punjab has identified the IT Enabled Services, Telecommunications

and Hardware industry as the niche areas for the State because of the vast

opportunity these offer for employment and wealth generation. A policy for

Electronics Industry was announced by the Punjab Government in 1996. Electronics

Industry has played a great role in the growth of Industry and creation of

employment opportunities. The Government of India has also renamed its

Department of Electronics as Department of Information Technology and both the

Electronics and I.T. Industries has been included in this Department. On line with

the Government of India, Punjab has also considered to both electronics and

Information Technology Industry to be covered under the same policy and

therefore, the incentives under this policy will also be made available to the

Electronics Industry.

1.1.2 In the IT Incentive Policy, 2000, as notified by the Department of Industries, theGovernment of Punjab has been adopting a common policy for both IT Services and

IT Enabled Services. However, with the expected growth of ITES and for the

development of a better understanding of industry needs, the Government

identified the need for special and targeted policy on ITES while reframing the IT

and ITES Incentive Policy for the Industry in the changed global scenario.

Government has been taking feedback from the Industry and incorporated

suggestions from the leading industry players, industry associations, academic

institutions and the concerned departments and agencies of the government in the

preparation of this policy.

1.2 Biotechnology (BT)

The commercial potential of biotechnology having been proved world over, the State

Government has set vision for a knowledge-driven Punjab and has decided to invest

liberally over 7 years for infrastructural and industrial development in this sector. The


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objective is to create highly visible, world-class research capability, which will support

the growth of knowledge intensive biotech industry in the State. The framing of

Biotechnology Policy of State is an expression of State Governments commitment to

this end. Also the formulation of this policy is very timely as sequel to the Vision

Document on Biotechnology released by Honble Prime Minister of India on September

7, 2001.

2. 2. Objectives:2.1 Information Technology

2.1.1 Both IT & ITES and Electronics Industry are the fast growing potential sectors most

suitable for a state like Punjab, specially in view of the mother-tongue influence

(MTI) advantage Punjab enjoys as compared to the other states. Punjab is

endowed with large pool of technically competent English speaking manpower and

the graduate and senior school levels. The ITES has been identified as a sunrise

sector in the National Association of Software & Services Companies. Mckinsey

Report 2002, which could drive the economic growth and prosperity of not just

states but even countries. It could therefore provide a long-term viable solution to

the problem of unemployment by creating jobs for a large number of educated

youths. The Government's is committed to leverage the advantage of this rapidly

growing sector.

2.1.2 Through its ITES policy and initiatives, it intends to be de-facto destination in India

for ITES and capture a large portion of India's ITES opportunities by strengthening

Punjab's value proposition;

2.1.3 Generate employment for educated youth in all streams in the State including the

towns like Patiala, Gurdaspur, Hoshiarpur, Sangrur, Ferozepur, Bathinda etc.;

2.1.4 Generate high-value-employment for IT and Engineering professionals from

engineering colleges, polytechnics and other reputed institutions;

2.1.5 Develop IT, ITES and Electronics Industry as a strong small and medium enterprise

sector in Punjab;

2.1.6 Attract foreign direct investment (FDI), both in IT, ITES and Electronics Industry by

specially encouraging the NRIs to invest in their homeland;

2.1.6.1 Increase export earnings and there by the State's GDP and revenue;

2.1.6.2 Enable the youth of the state to acquire skills and knowledge in this

important, fast growing sector, thereby making them highly

employable not just in Punjab based IT, ITES and Electronics companies

but in companies based anywhere in the world.


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2.2 Biotechnology

The advancements in biotech sectors have already lead to some dramatic and exciting

developments such as more than 90 drugs and vaccines approved by the US Food and Drug

Administration (FDA) and range of diagnostics, benefiting about 200 million people worldwide;

high yielding, pest-resistant crops; Golden rice, rich in vitamin-A; cleaner industrial processes

with lesser waste generation and lower energy consumption. Further, 3.1 million chemical

letters of DNA have been sequenced and a draft human genome map has been made available

in public domain. This information will be used by biotech industry to develop innovative drugs,

vaccines and diagnostics for virtually all illnesses. It is speculated that new drugs worth thirty

to fifty one billion dollars each will emerge from human genome mapping soon. Hence, in

order to tap the potentials of this sector effectively, Biotechnology Policy component of this

document has been formulated with an objective of launching a major well-directed effort for:

Attaining new heights in biotechnology research Harnessing biotechnological tools for economic development Scientific and technological empowerment of human resource Ensuring social justice especially for the welfare of rural population & weaker

sections of the society

2 Features of the IT, ITES, Electronics and Biotechnology Policy:2.1 In order to achieve its objectives, the Government of Punjab intends to provide the

most optimal environment for IT, ITES, Electronics and Biotechnology companies.

Towards this end, Government of Punjab has developed this policy with following

commitments:

3.2 Easy Availability of Trained Manpower:

3.2.1. Ensure the availability of high quality manpower in IT, ITES, Electronics and

Biotechnology segments who are certified by renowned institutions and

Industry.

3.2.2. For this purpose, a State level Institution for specific training in ITES inassociation with the Industry and world renowned Institutions is being set upwhile for BT sector, the existing universities / institutions are generating

manpower in the areas of agriculture, health care and environmental

biotechnology.

3.2.3. Coordinate between the technical institutions and other higher institutions oflearning and the industry to develop sector specific IT, ITES and BT course


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curricula and modules

3.2.4. Provide Institutional mechanism and frame-work for shared training facilitiesand infrastructure at minimal cost.

3.2.5. Promote development of requisite support system in the form of softwares,educational kits etc on biotechnology for schools, colleges and general public.

3.3. High Quality infrastructure:3.3.1 Provide reliable, cost effective telecom infrastructure with adequate built-in

redundancy

3.3.2. Work with key real estate developers to provide multi-option ready-to-move-inIT, ITES, Electronics and Biotech Industry office, commercial and

entertainment space, plots for customize development of I.T. and BT

complexes/ Parks and developed land for establishment of IT and BT campuses

and townships by large companies

3.3.3. Provide reliable and economically priced electrical power with adequate built-in redundancy. Enable IT, ITES, Electronics and Biotech Industry companies to

set up their own captive power generating facilities and provide single window

clearance for establishing such Captive Power Stations to IT, ITES, Electronics

and Biotech companies.

3.3.4. Ensure rail, road accessibility and reliable public and private transport for rapidmovement of employees and businesses

3.4. Supportive environment:3.4.1 Provide the most supportive, investor friendly and progressive regulatory

environment.

3.4.2. Re-engineer the role of Government as Facilitator rather than a regulatoryagency.

3.4.3. Setting up empowered committees for single point clearances and approvals ofall projects and considering special packages for mega-projects of more than

Rs.25 crores.

3.4.4. Provide single window interfaces for facilitating the setting up, and running ofbusiness.

3.4 Venture Capital Fund:The Government of Punjab has already setup PUNJAB INFOTECH Venture Fund with

the initial corpus of Rs. 20 crore for the development of IT and ITES Industry in the

State.


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The details of the commitments indicated above under each head are as under:

4. High Quality Manpower4.1 Information Technology

4.1.1 The Government of Punjab is presently in the process of consolidating the

gains of technical education in the state while specifically focusing on Post-

Graduate programmes in the specialized areas like Information Technology,

Electronics, Micro-electronics, Tele-Communication, IT Enabled services and

Bio Technologies. For the purpose, Punjab Technical University, Jalandhar, is

being strengthened to open multi-disciplinary advance centres in these areas.

The private engineering colleges in the state would be better regulated for

their course curriculum, quality of teaching staff, hardware facilities, and

the technical tie-ups with foreign/Indian institutions of advance learning.

4.1.2 Punjab believes that highly skilled, English speaking manpower is a keyprerequisite for ITES companies. Towards this end, Punjab intends to provideITES companies, manpower that is proficient in English as well as in softskills

and domain specific skills. It intends to do this by training approximately

100,000 to 150,000 students by 2010 of which 5,000 to 10,000 will be trained

in the next 2 years.

4.1.3 Developing Language Skills is a long-term process. Earlier these methods and

measures are introduced in the school curriculum the better it would be. The

government shall, therefore, encourage the private sector to open high

quality English medium public schools by providing cheaper land and other

infrastructural facilities. The quality of the regulations and the regulator for

such schools shall be improved to bring in qualitative difference in the

standards of education and at the same time cross subsidize the weaker

section of the society. The Government shall also encourage inclusion of

other foreign languages like Spanish, German, French, and Japanese as part

of the curriculum through Schools, colleges, universities and other advanced

private training institutes, so as to develop relative advantage for ITES

industry to capture untapped markets.

4.1.4 To address the requirements of ITES companies, Punjab will institute a two-tiered training programme. The first level of this training programme,

required for all potential ITES employees, will be geared towards augmenting

basic English capability. The second level of this programme will focus on

specialized domain skills for ITES. Further, Punjab will also provide value-

added elective courses for domain specific skills such as HR training, payroll

processing, accounting, banking, insurance processing, Punjabs local laws,


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etc. in the second level of training.

4.1.5 In order to institutionalize the training programme, the state will:

4.1.5.1 Set-up an Institute of Excellence in IT & ITES in collaboration with the IT

Companies and some of the best Universities/ institutions in the world. The

advisory board of this institute will have representation from both academiaand industry and will be responsible for ensuring that the curriculum design,

certification methodology, etc. are in line with industry needs and support

marketing of the programme to end customers. For this purpose, the 15 acres

of prime land in Chandigarh (Mohali) along with the seed money of Rs. 20

crores is being contributed by the State Government. The State Universities

have also been requested to offer special courses through their English

departments for training manpower for ITES.

4.1.5.2 Franchise ITES diploma programmes to IT training providers with a well-established network of training institutes to increase training capacity and

expedite penetration into smaller towns.

4.1.6 The International Institute of IT and ITES shall also:

4.1.6.1 Develop certification for the programmes together with leading educational

institutions in the world.

4.1.6.2 Tie up with the extensive network of colleges throughout the state to administer

the diploma and certificate programme.

4.1.6.3 To setup corporate training institutes with collaboration of major ITEScompanies, who inurn will set the curricula and standards for training. The

companies will be able to get their prospective employees trained at these

institutes.

4.1.6.4 Negotiate with banks to provide soft loans with a payback period of 3 to 5 years to

the students after completion of the course.

4.1.6.5 Attract private ITES training providers specially for the B and C class towns.

4.1.6.6 In the long term, the proposed institute will work towards institutionalizing and

strengthening the English language capability in the State. It will:

4.1.6.6.1 Assess and redesign the existing English curriculum in schools, colleges and

polytechnics to ensure higher English standards in the state.

4.1.6.6.2 Design a comprehensive curriculum for teacher training programmes by

developing a greater understanding of teaching methodologies and increased

awareness of the needs of learners.


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4.2 Biotechnology

Human resource development in biosciences and biotechnology will be

enhanced to achieve widespread excellence in both the teaching quality and

support resources. The short and long term training programmes for

technicians, scientists, industrialists, IPR experts covering whole arena of

biotechnology research and commercialization would be initiated. Special

programmes would be launched to train students in biotech ventures. Awards

and incentives would be instituted to recognize meritorious efforts.

5 High Quality Infrastructure5.1 High quality infrastructure is one of the most important pre-requisites for fostering

the growth of the IT, ITES, Electronics and Biotech industry. This is primarily because

each aspect of infrastructure has a significant impact on the costs incurred by a

Industry.

5.2

To address these objectives Government of Punjab will encourage private realestate developers to develop and reinforce the key aspects of infrastructure

namely, office infrastructure, city infrastructure, residential and commercial

infrastructure and the social educational, recreational and health infrastructure.

5.3 High Quality Office space/ infrastructure5.3.1 Ready availability of high quality office space serviced with all basic amenities like

high-speed telecommunication links with redundant connectivity, uninterrupted

power supply with back-up power facility, central air-conditioning, etc. are critical

to attract IT, ITES, Electronics and Biotech companies. Therefore, it is the endeavor

of the Government of Punjab to facilitate creation of this space in the State for

Biotechnology. For IT, this facility will be created not only in and around

Chandigarh and Mohali but also in other important B and C class cities and towns

in the state such as Ludhiana, Patiala, Jalandhar, Amritsar etc.

5.3.2 It will ensure that the following facilities are available to the IT, ITES, Electronicsand Biotech companies:

High quality Built-up space: To cater to the rising demand of the ITES

and Biotech industry, Punjab will encourage the development of quality

office space. Government will facilitate setting up of IT Parks by the

private sector in the potential locations for the development of IT

industries.

Private IT and BT Park developers will be given assistance in land

acquisition and re-zoning wherever required. This is divided in two


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categories based on the requirements of such companies:

5.3.2.1Ready to move in office space: Government of Punjab will ensure that a host ofrenowned real estate developers would offer high quality office space.

5.3.2.2Built-to-suit office space: The same set of incentives, as available toinfrastructure developers, would be applicable to the IT, ITES, Electronics and

Biotech companies, which decide to build their own facilities.

5.4 In order to attract renowned real estate developers, the Government of Punjab willprovide the administrative and asset base support as well as foregoing select revenue

streams as detailed below:

5.4.1 Administrative Support:5.4.1.1Provide State level statutory clearances within specified time frames after the

project is sanctioned in favour of the developer and also automatically grant non-

statutory state level clearances. Provide full support for obtaining all central

Government level clearances.

5.4.1.2Acquire land necessary through Punjab Small Industries and Export Corporation(PSIEC) or Punjab Urban Planning & Development Authority (PUDA) for the project

or other means, if the same does not already belong to the Government and

undertake all rehabilitation & resettlement activities resulting from acquisition of

land. Wherever possible the Government may provide out of its land pool for

such projects.

5.4.1.3The Government shall also act as a facilitator for the private sector acquiring landfor developing the Knowledge parks under the Industrial park scheme of

Government of Punjab/ India.

5.4.1.4Special land acquisition procedures are required for the mega-projects of INR Rs.25 crore and above requiring large land chunks. The government shall make

suitable amendments in the applicable acts/ rules to facilitate such land

acquisition and its conversion in land use.

5.4.1.5The entity-creating infrastructure on such allotted land shall be exempt fromrestraining clauses of PSIEC and PUDA vis--vis sub-leasing/ transfer / sale of

portion of that infrastructure.

5.4.1.6Commit / facilitate development of linkage infrastructure for IT, ITES, Electronicsand Biotech projects. The government shall include such industrial parks in its

town planning and other schemes so as to improve access to such Industrial Parks

/ knowledge parks, through air, rail and road.


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5.4.1.7The Knowledge park under this scheme, besides intelligent ready to move inspace / facilities for housing Knowledge based entities, may include social

infrastructure like schools, hospitals, convention centers, community center,

shopping areas, entertainment zones and guest house/ transit housing/ hostel

specifically for the industry located in the IT & BT park subject to the zoning

restrictions of the local authority.

5.4.1.8The Punjabs zoning and FSI rules may be amended to allow high-rise buildings forthe Knowledge parks and the entities within the knowledge park.

5.5 Foregoing Revenue Streams:5.5.1 The materials and equipments required for construction of IT, ITES, Electronics and

Biotech infrastructure projects may be exempted from Octroi, during construction

and for a period of three years thereafter. These exemptions would be available to

installation in all the IT & BT parks and the units to be based in these parks.

5.5.2

The acquisition of land and subsequent sale/ transfer of developed infrastructureshall attract zero stamp duty for three years from the date of notification of this

policy and thereafter a lower stamp duty of 2% in line with some of the

international parks.

5.6 Reliable Telecom:Punjab already has adequate telecom capacity throughout the state which can be

dedicated to IT, ITES and BT. The government would ensure:

5.6.1 Presence of multiple telecom service providers offering high-speedtelecommunication links with several levels of built in redundancy for all IT and BT

parks. The state already has multiple private and government providers of telecom

facilities like VSNL, STPI, BSNL, Spice, HITL, Reliance and Bharti.

5.6.2 Establishment of Punjab Wide Area Network (PUNWAN) which will be the ITbackbone connecting Government offices upto the Block level.

5.6.3 Service level agreements (SLAs) in place with different telecom service providers toprovide quality of service (QoS). The SLAs will be designed to include normal

anticipated delays as a safety margin, and will provide incentives to the concerned

service providers on timely delivery of service.

5.6.3.1 In order to attract telecom service providers to Punjab and encourage existingones to expand their operations, Government of Punjab has already notified free

Right of the Way (RoW) Policy allowing any entrepreneur holding the necessary

licenses of ISP or telecom operator from Department of Telecommunications


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(DOT), to lay optic fibre along the state highways, roads, district roads, municipal

areas and link-roads free of any license fees or special charges.

5.6.3.2Permission to set up base stations and telecommunication network equipment inearmarked areas would also be given on priority.

5.7 Uninterrupted Power Supply: The State of Punjab is basically a power rich State.Government of Punjab will provide reliable power supply and will ensure:

5.7.1 Rapid steps would be taken by PSEB to set-up redundant power connections. Themaximum time period to establish a connection from the existing lines will be 10

working days with a 3 months provision of setting up a captive transformer. The

application for seeking a connection with the estimated load requirements shall be

dealt with on priority by PSEB and there shall be simplified procedures for such

sanction of load. Suitable amendment shall be made in PSEB rules to cater to these

special sectors.

5.7.2

Exemption from statutory power cuts for IT, ITES & Electronics parks/ facilities andBT parks / facilities and 24 X 365 (round-the-clock) maintenance services.

5.7.3 Exemption from peak load restrictions in view of the special requirement of round-the-clock power supply.

5.7.4 Service level agreements (SLAs) with the nodal agency would be available to ensurequality of service (QoS).

5.8 PSEB / Government would facilitate single window clearance for establishing CaptivePower Stations to IT, ITES, Electronics and Biotech companies.

Incubation Centers:

5.8.1 Information Technology

Government of Punjab will encourage the development of Incubation Centers in

Engineering Colleges, polytechnics and universities in collaboration with Technical

Institutes and State IT Parks. The incubation centers will provide complete start up

facilities with the computer systems and telecommunication links for a limited period

of time. The entrepreneurs are expected to pay a reasonable rent for the premises and

move out in a short period to commercial space.

5.8.1 BiotechnologyA Centre of Excellence for Biotechnology would be set up in the State that would aim

at accelerated and coordinated research and development in the frontier areas of

biotechnology and their commercialization to the economic advantage of the state. It

would include state-of-art physical infrastructure for research, development and

production related to agriculture, health care and environmental biotechnology. It will


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also support & strengthen the existing scientific base in the state. The Centre would

nurture the leads of potential utility emerging from the existing institutes/

universities, which will serve as its satellite centres as well as conduct cutting edge

research and development. The concept of Centre of Excellence is unique in itself as it

will cover the whole range of conceptualization to commercialization under one roof.

Accordingly, the Centre shall consist of Research & Development Component, Scale up

& Demonstration Units and Biotechnology Business Incubators to meet the validation

and updation requirements of the existing and upcoming biotech industry. Apart from

these, it will have a consultancy cell that would offer services of patent facilitation,

project detailing, market assessment, technology transfer, fund syndication and

industry oriented manpower training.

5.9 Shared training Infrastructure: Government of Punjab will encourage building ofshared training infrastructure in the existing institutions as well as IIIT for IT and Centre

of Excellence for Biotechnology for BT like seminar / conference rooms, computers and

projectors for companies to use periodically on a rental basis. This will help reduce theHRD investment for emerging IT, ITES, Electronics and BT players.

5.10 Law & Order situation: The State of Punjab presently has one of the lowest crime rateamongst all States. The State Government is committed to ensure industry friendly law

& order in the State and specially in the I.T. and BT Parks.

5.11 Restaurants, food courts: Government of Punjab will encourage leading international /national food and entertainment chains to set up shops in Punjab and offer multiple

options to suit different budgets in or in the vicinity of the IT and BT Parks.

5.12 Citys civic Infrastructure: Government of Punjab will focus on enhancing the quality ofservice (QoS) of state run bodies providing these support services to IT, ITES, Electronics

and BT companies. It is committed to working along the following areas to ensure a

robust city infrastructure:

5.13 Public Transport: The Government of Punjab would develop sustainable means of publictransport to service the needs of the IT, ITES and Electronics companies and will: at the

doorstep

5.13.1 Ensure adequate numbers of buses and trains are available to transport employees ofIT, ITES & Electronics companies.

5.13.2 Establish a bus depot/ stand close to IT, ITES and Electronics parks to handle thehigh volume of traffic.

5.13.3 Establish customer service centers for both bus and rail services to providecompanies with a single contact to the service provider and also ease the procedure

of bookings, payments etc.


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5.13.4 Encourage state run transport providers to sign Service Level Agreements (SLAs) withcompanies and infrastructure developers.

5.13.5 Make provisions in the state laws so as to negate the ill effects of transport unionson the movement of materials and equipment of IT, ITES, Electronics and Biotech

units in this sector.

5.14 Roads, water etc.: Provide roads and water facilities at the site of IT, ITES &Electronics and BT parks.. This will involve replicating facilities such as street lighting

with photo sensor controls, municipal water reservoir, treated water supply network,

excellent sewerage system, RCC storm water drain network to the IT, ITES & Electronics

and BT parks.

5.15 Residential and commercial infrastructure: This includes amenities such as high qualityand affordable housing, entertainment, reputed schools and hospitals etc. that

employees of IT, ITES, Electronics and Biotech companies look for in a city. Government

of Punjab is actively working towards improving the quality of life in the State. It will

ensure:

5.15.1.1 High quality residential space: Government of Punjab would encourage

development of residential space through private developers and PUDA :

5.15.1.2 Provide a range of options to suit the budgets of various IT & BT

professionals & ITES Electronics and Biotech Industry employees.

5.15.1.3 Attract private real estate developers to build excellent residential facilities.

5.15.2 Commercial space: Government of Punjab will encourage development of

commercial space dedicated to shopping and entertainment. The government is working

towards:

5.15.2.1 Attracting leading food and entertainment chains to build a strong lifestyle

brand for Punjab. The government will earmark viable plots of land for these companies to

build and/ or expand their facilities.

5.15.2.2 Attracting private real estate developers to build suitable support

infrastructure such as entertainment complexes, mega malls etc. The Government of Punjab

will provide administrative and asset based support to these developers in line with the

incentives delineated in this section.

5.15.2.3 Attracting leading schools in the country to establish in Punjab by offering

suitable plots of land and other administrative and financial support. They will be given

necessary clearances within a specified timeframe.

5.15.2.4 Attracting leading healthcare players and educational institutions to

augment their existing healthcare set up and open new schools with international quality


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standards. The government will offer land at subsidized rates and also accord necessary

help in securing all approvals through the single Empowered agency.

5.16 Easy Accessibility / mass transit: Punjab will improve international connectivity in theyears to come. It will:

5.16.1 Influence domestic airlines to link to incoming and outgoing international flights

so that travel time to Punjab destinations is reduced.

5.16.2 Expedite the development of the new international airport at Amritsar, Halwara

(near Ludhiana) and Chandigarh.

6 Supportive environment:Government of Punjab believes that providing a supportive and progressive Government

is critical to realizing the states aspiration in the high-tech space. Therefore,

Government of Punjab intends to undertake several initiatives to make Punjabs

regulatory environment, the most optimal environment for ITES, Electronics and Biotech

companies. The government will:

6.1 Amend / relax / exempt the relevant provisions of Punjab Shops and Commercial

Establishments Act 1958, to make it more suitable for the IT, ITES and B Electronics

companies. It will allow IT, ITES, Electronics and BT companies to:

6.1.1 Employ women and young persons (between age group 18 to 21) during night shift,subject to provision of adequate security and transport, through amendment in

section 30

6.1.2 Have flexi-timing by asking an employee to work for more than eight hours aday, without exerting an additional financial burden on the companies, in terms of

overtime payments, as long as the statutory requirement on the maximum weekly

working hours, 48 hours, is respected. This will be achieved by amending section 7.

6.1.3 Operate twenty four hours a day by amending section 8 and 96.1.4 Operate 365 days in the year by amending section 10, 11 and 126.1.5 Reduce the procedures involved in retrenching employees, if certain conditions

are satisfied, by amending section 22

6.2 Develop an institutional mechanism to provide specific labour policies and a singleinterface to the government. Government of Punjab will also provide a reliable single

interface to facilitate the start up process and help IT, ITES, Electronics and BT

companies in obtaining state government approvals.

The single interfaces for IT and BT in PUNJAB INFOTECH Corporation and Punjab State

Council for Science & Technology respectively will provide escort executives to assist


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each IT, ITES, Electronics and Biotech companies. In addition to helping companies with

the necessary approvals, escort executives will help resolve all issues between the

government and companies, explain relevant laws to companies and help them complete

all application forms and formalities.

6.3 Adopt appropriate regulation on Data Protection and Consumer Privacy to reassure theIT, ITES, Electronics and Biotech companies and their customers of the safety of their

data and indicate the Government of Punjabs commitment to, and respect for,

consumer privacy.

6.4 Work with the Government of India for simplifying the custom bonding procedure.Multiple entities function in one common infrastructure therefore the state government

will work with the government of India for simplifying the existing procedure of physical

isolation and demarcation of the custom bonding of IT/TES/Electronics/Biotech units, the

declaration of an item value and its existence on the fixed asset register shall be

considered as physical bond for these entities.

6.5 The State will work towards simplifying the existing STP scheme to allow IT, ITES,Electronics and Biotech companies to self certify as custom bonded warehouses.

Work with the Government of India for simplifying the rules and procedures of Excise and

customs wherein a declaration/self attestation by the authorized signatory of the IT/

ITES/ Electronics/Biotech entities is considered as approval and sanction subject to

Quarterly filings with the Department.

6.6 Work with the Government of India to simplify the procedure of customs clearance at thetime of import of items for IT/ ITES/ Electronics/Biotech entities, the present system of

appraisals and the valuation system shall be dispensed once an import certificate is

issued by the director STPI.

7 Venture Capital Fund:Punjab Venture Capital Ltd. (PVCL) has been established to facilitate and support growth of

the Information Technology Industry in the State of Punjab. It is a Rs. 20 crore 10 year

close ended fund established jointly by the Punjab State Industrial Development

Corporation Limited (PSIDC), PUNJAB INFOTECH, the Punjab Financial Corporation (PFC)

and the Small Industrial Development Corporation Limited (SIDBI). The fund is making

direct investments in equity and equity related instruments of companies that have

operations in Punjab. The fund is dedicated to investing in companies operating in Software

and related business such as networking, multimedia and data communication products and

IT enabled services.

Small Industries Development Bank of India (SIDBI) has set up a venture capital funds of Rs.

50 crores for Biotechnology.


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8 Quality Certification:The Government of Punjab will encourage IT, ITES, Electronics and Biotech companies in

the State to go for certifications such as ISO, SEI-CMM etc, so as to compete in the global

marketplace. Necessary provisions for granting subsidy /financial support to the companies

for achieving the certification will be made available.

9 Intellectual Property Rights (IPR):The Government of Punjab will encourage and promote R & D projects capable of

generating competitive IPR and also their effective protection. The development of more

patents and steps against piracy of patented products will be given a major focus. Action

will be taken to protect these indigenous knowledge systems through state policies and

recommendation for enactment of suitable laws.


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INCENTIVES AND OTHER EXEMPTIONS

The following special incentives shall be available to the IT, ITES, Electronics and Biotech units

set up in the State of Punjab irrespective of their locations. These would be in addition to the

Incentives available to the General Industry under the Industrial Policy, 2002 of

Government of Punjab.

To further make the investment and business environment attractive & friendly for the IT,

ITES, Electronics and Biotech Industry, High Powered Consultants in each area are being

appointed by Government of Punjab for recommending sector specific incentives to be

provided to each of these sectors in addition to the incentives already being provided by

Government of Punjab.

While the financial benefits would be available to any unit established after 15 th March

2002, all other exemptions and benefits would also be available to the existing units.

1. Single Window Service:In all the Knowledge, Technology, IT, ITES, Electronics and Biotech Parks/ estates/

complexes set up by Punjab Information and communication Technology Corporation

Limited or in its joint ventures or facilitated by the Corporation, setting up of projects

would be facilitated through a Single Window Service. The Biotech units facilitated by

State Deptt. of Industries and Commerce would also be provided with a Single Window

Service In all such projects Punjab Information and communication Technology Corporation

Limited for IT and Punjab State Council for Science & Technology for BT will function as

single window service agencies to assist the entrepreneurs/ investors for getting all

statutory clearances required for setting up the units. In case of private sector technology

parks also Punjab Information and communication Technology Corporation Limited and

Punjab State Council for Science and Technology will assist the entrepreneurs in getting all

clearances.

2. Tax / local tax Rationalization and benefits:2.1. The sales tax rates on IT and BT products would be maintained at the level of

the minimum floor rates announced by Government of India wherever applicable.

No turnover tax, additional sales tax, surcharge or any other additional levy related

to sales tax, shall be applicable to IT and BT products and services.

2.2. There would be no restrictions on the movement of capital equipment includingIT, ITES, Electronics and Biotech equipment, hardware peripherals, captive power

generating sets, UPS sets and telephone exchanges subject only to sales tax

payments as per orders enforced.

2.3. Rationalisation of Octroi: No octroi will be charged on the IT, ITES, Electronics and


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Biotech items including hardware, software, components, PCBs, populated PCBs

and mechanical items relating to IT and ITES and electronics, which are being

brought into the Industrial Areas/ Industrial Focal Points/ IT parks / complex,

knowledge parks notified by Punjab Information and communication Technology

Corporation Limitedfor assembly, job work, repairs & maintenance and are to be

re-sent to the original owner and the BT parks notified by the State Govt.

3. Locational benefits:Software, Electronics and bio-informatics industry which needs electrical power up to 10

KVA will be permitted to be established without any locational restrictions and will be

eligible for all incentives and concessions. For this purpose, subject to certain norms to be

notified by Punjab Information and communication Technology Corporation Limited, the

accredited training institutes, as notified by the Government from time to time, will also

be eligible to claim industry-status, only for enabling them to obtain term-loans and bank

finance at industry rates.

4. Benefits in respect of electric power:4.1. Treated as Industrial (and not commercial) consumers. Power at industrial

power tariff and all other admissible incentives and concessions in respect of power

shall be applicable to the IT, ITES, Electronics and Biotech industry including those

in the urban areas. No commercial power-tariff would be charged to such

industries. The power connections to such industry would be given priority in both,

sanctioning and servicing.

4.2. Exemption from Electricity Duty: All IT, ITES, Electronics and Biotech unitslocated in the State of Punjab are exempted from payment of electricity duty for a

period of 5 years from the date of release of electricity connection.

4.3. No power cuts or restrictions of peak load hours: All IT, ITES, Electronics andBiotech units located in the State of Punjab are exempted from the purview of

statutory power cuts. These industries have been declared as continuous process

industry with exemption and would be exempted from peak load restrictions

subject to to procedure prescribed by the PSEB in this regard.

4.4. Captive power generation is permitted for industries through out the State inrespect of IT, ITES, Electronics and Biotech units. The Captive power generation

sets installed by such industry will be eligible for total exemption from payment of

electricity duty for captive power generation.

5. Facilitation Services:5.1. All IT, ITES, Electronics and Biotech units are exempted from obtaining NOC/


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consent from the Punjab Pollution Control Board (PPCB) provided that where the

number of workers in such industry is more than 300 and there exists no sewerage

facility, no exemption shall be available. Even the hardware industries, except for

those having electroplating, heat treatment and painting process, are exempted

from obtaining NOC/ consent of Punjab Pollution Control Board (PPCB) provided

that where the number of workers in such industry is more than 300 and there

exists no sewerage facility, no exemption shall be available.

5.2. All IT, ITES, Electronics and Biotech units are allowed to self-certify the fullobservance of the provisions of law in respect of the following Acts and Rules

instead of the statutory inspections/ verification reports by the concerned

Departments in respect of the following acts:

5.2.1. The Factories Act5.2.2. The Employment Exchange (Notification of Vacancies Act)5.2.3.

The Payment of Wages Act

5.2.4. The Workmen Compensation Act5.2.5. The Contract Labour (Regulation and Abolition) Act5.2.6. The Minimum Wages Act5.2.7. The Employees State Insurance ActAll IT, ITES, Electronics and Biotech units would be totally exempted from the

provisions of Punjab Shops and Commercial Establishments Act 1958.

However, this will not take away the statutory power of the Department concerned

to take action in case a false certification or default come to notice.

5.3. Three shifts operation: General permission has been granted to all IT SoftwareIndustry and IT Enabled Service Industry and electronics industry as well as the

Biotech Industry to operate in three shifts and also employ the ladies staff on such

jobs subject to the conditions notified.

6. Infrastructure incentives and facilitations:6.1. Land or ready to move in office space may be offered to IT, ITES, Electronics and

Biotech units at a reasonable / discounted price worked out by the Government for

each IT and BT Park subject to:

6.1.1. Land being allotted by Government / PSIEC/ Punjab InfoTech withprospective effect.

6.1.2. Minimum number of employees to be hired by a company being 300,


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corresponding to 0.30 acres of land with a minimum investment of Rs.

3.0 crores.

6.1.3. Minimum gross salary/ wage of Rs. 5000/- per month.6.1.4. Sustaining the employment for a minimum period of two years.6.1.5. The IT, ITES, Electronics and Biotech companies shall provide a bank

guarantee/ corporate guarantee that he shall continue to fulfill the

conditions for availing the land subsidy for next three years.

6.1.6. In case the IT, ITES, Electronics and Biotech companies does not createor maintain the jobs promised while availing the discount, within 3

years, the bank guarantee / corporate guarantee to be taken from the

company would be invoked. The amount invoked would be linked to the

shortfall between the jobs promised to be created and jobs actually

created. Allow for phased implementation and guarantee structure

especially for mega projects or ITES/Electronics/Biotech townships

6.1.7. The infrastructure providers will be given a reasonable period to benegotiated between provider and government from the purchase of

land to market and sell the office space.

6.2. Exemption from Stamp Duty and Registration Fee: Property transaction inconnection with setting up of IT & ITES and Biotech Parks, Complexes and

electronics/Biotech estates as well as transactions within in the constructed IT &

ITES and BT Parks, Complexes and electronics estates as authorized by the

Department of Industries & Commerce, Government of Punjab or Punjab

Information and communication Technology Corporation Limited (Punjab InfoTech)

shall be exempted from payment of stamp duty for period of three years. The

maximum registration fee charged from these units shall not be more than Rs.

1000.00. There shall be no stamp duty on lease and financial instruments of units

located in such notified areas during the setting up of these parks and thereafter

for a period of three years. Thereafter a stamp duty of 2% would be chargeable on

such transactions.

6.3. Relaxation of FSI: Government of Punjab would offer relaxation of FSI (FloorSpacing Index) in the towns to the extent of 50% for IT & ITES and BT Parks,

Complexes and electronics / Biotech estates as authorized by the Department of

Industries & Commerce, Government of Punjab or Punjab Information and

communication Technology Corporation Limited (Punjab InfoTech). Similarly, FSI

for areas other than towns would be relaxed by a factor of 100% of existing FSI.

6.4. Exemption from land and building tax: The portion of the commercial buildings


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which are fully dedicated to IT, ITES, Electronics and Biotech Industry will be

exempted from the property tax for a period of 5 years. In case of change of use of

building prior to 5 years such exemption would automatically be revoked.

7. Assistance on IT in Gurmukhi Script:One time Gurmukhi Script assistance shall be admissible to the units engaged in the

development of IT in Gurumukhi Script amounting to 5% of the total turn over subject to a

maximum of Rs. 5 lacs provided that the number of qualified information technology

professionals engaged on such project by the unit/ institution is more than 10. This will

be limited to a budget provision to be made under this head and will be given on first come

first serve basis.

8. Purchase and Order Preference:The IT, ITES and Electronics units located in the State of Punjab shall be given purchase

preference on IT and Electronics resources including Application Software Development for

all Punjab Govt. Departments, Undertaking/ Boards/ Institutions etc. all other conditions

being the same. This incentive shall, however, be available to only ISO or SEI-CMM certified

units.

9. Procedure for availing incentives for IT, IT enabled services, Electronics, BT, BTenabled services & Biotech companies:

Most of the incentives and exemptions available under the policy are automatic. For

availing other incentives listed in this policy, the eligible IT, ITES, Electronics companies,

BT, BT enabled services and BT companies will file their applications with notified

Executive Authority which shall act as the single window service for processing the cases

for award of incentives by the Government.

10. Interpretation / Relaxation / Amendment:The Principal Secretary Industries & Commerce shall be competent to interpret/ relax/

amend any of the above provisions under this policy in consultation with the concerned

departments/ agencies of Government.

11.Special Incentives for Mega Projects / Pioneering Projects:For Mega projects, with investments exceeding Rs. 25 crores and creating more than 500

jobs, Government of Punjab, may consider special package of incentives, on a case to case

basis, based on the gestation period of projects, its pioneer nature, employment

generation potential, vocational aspects, state of the art technology, profitability, scope

for further related investments etc. For this purpose a proposal would required to be

submitted to the Department of Industries & Commerce.


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12.Amendments / Modification in the Definition of IT, ITES & Electronics , BT and BiotechUnits:

The Empowered Committee for Industrial Approvals shall be empowered to carry out

Amendments / Modification (in the list according to the advancement in IT & BT sector) in

the definition of IT/ ITES Industry / Electronics / Biotech Units to be covered under this

policy.

13.The package of incentives will be valid initially for a period of 3 years and subject toreview there after.


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SPECIAL INCENTIVE POLICY FOR IT INDUSTRY

A. DEFINITION OF IT, ITES and Electronics and SERVICES:

Categories of industries include in the scope/ definition of Information Technology

Industry:

1. Computing devices including:1.1. Desktop / Personal computer

1.2. Thin/ Thick clients

1.3. Servers

1.4. Workstation

1.5. Nodes

1.6. Terminals

1.7. Network PC1.8. Home PC

1.9. Laptop computers

1.10. Notebook computers

1.11. Palm to computer/ PDA

1.12. Hand held computer devices

2. Network controller cards/memories including:2.1. Network interface card (NIC)

2.2. Adapter-Ethernet/PCI/EISA/Combo/PCMCIA

2.3. SIMMs-memory

2.4. Central processing unit (CPU)

2.5. Controller-SCSI/Array

2.6. Processors-Processor/Processor power module/upgrade

2.7. Smart card devices

3. Storage units including:3.1. Hard-disk drivers/Hard drives

3.2. RAID devices & their controllers

3.3. Floppy disk drives

3.4. CD-ROM drives

3.5. Tape drives-DLT devices/DAT

3.6. Optical Disk drives

3.7. Other digital storage devices including magnetic tapes & DATs


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4. Others:4.1. Keyboard

4.2. Monitor

4.3. Mouse

4.4. Multimedia kits

4.5. Scanners

4.6. Joystick

4.7. Card readers

4.8. Computerised time recording devices

4.9. Tablets

5. Printers and output devices including:5.1. Computer Printers of all types

6. Networking products including:6.1. Hubs

6.2. Routers

6.3. Switches for networking

6.4. Computer network concentrators

6.5. Trans-receivers

7. Software including:7.1. Application software

7.2. Operating system

7.3. Middleware/Firmware

7.4. Any component level development of the above software.

7.5. Design and Quality assurance work for these software.

7.6. System integration work/components for software.

7.7. Any localization and SCM work in the software.

7.8. Extension development (modules outside the main software).

8. Power supplied to computer systems including8.1. Switch mode power supplies

8.2. Uninterrupted power supplies

9. Networking / Cabling & related accessories (related to IT Industry)9.1. Fibre optic cable


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9.2. CAT 3, CAT 5 & CAT 6 & other network specific cable

9.3. Connectors, terminal blocks

9.4. Jack panels, patch cord

9.5. Mounting cord, patch panels

9.6. Back boards, wiring blocks

9.7. Surface mount boxes

10.Consumables including:10.1. CD-ROM/Compact disk

10.2. Floppy disk for computer

10.3. Tapes DAT/DLT for computer

10.4. Ribbons for computer

10.5. Toners

10.6. Inkjet cartridges for computer printers

10.7. Inks for computer output devices

10.8. Continuous Computer Forms

11.Electronic Components:11.1. Printed circuit board assembly / populated PCB relating to computer integrated

circuits/ICs & connectors for computers

11.2. Magnetic heads, Print heads

12.Tele-communication equipments including:

12.1. Videophones

12.2. Multiplexers/ Muxes

12.3. Modems

12.4. VSAT

12.5. Computer communication equipments

12.6. Wireless datacom equipment Including Set top boxes for both video and digital

signaling

12.7. Receiving equipment like Pagers, Mobile Cellular Phones etc.

13. Information Technology services:

13.1. Internet Service Provider

13.2. E-mail Service Provider

13.3. World wide web Service Provider

13.4. E-commerce & content development


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13.5. Electronic Data Interchange (EDI) Services

13.6. Video conferencing

13.7. V-SAT, ISDN services

13.8. Electronic Data Center activities

14. IT Enabled Services: ITES include processes and services sourced from a place that is

located in a place separate from that in which the end users are located. It is delivered

over private and secure public telecommunication networks. These services can be sourced

from external contractors, own subsidiary or joint ventures.

15. ITES include, but are not limited to:

15.1. Customer interaction services, e.g., call/contact centres and email help desks

15.2. Engineering and design15.3. Back office processing

15.4. Finance and accounting (provided remotely)

15.5. Insurance claims processing (provided remotely)

15.6. HR services (provided remotely)

15.7. Web site development and maintenance services

15.8. Data search, integration and analysis

15.9. Network consulting and management

15.10. Remote education

15.11. Animation (provided remotely)

15.12. Market research (provided remotely)

15.13. Translation, transcription and localization (provided remotely).

15.14. Consultancy (Provided remotely) for:

15.14.1. IT sector

15.14.2. ERP

15.14.3. CRM

15.14.4. MRM

15.14.5. Technical support

15.14.6. Business Systems & Processes

15.15. Data Processing

15.16. System Integration and customization.

15.17. System Up gradation services


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15.18. Designing and designing systems

15.19. Call centers:

15.19.1. Voice- Both inbound and outbound

15.19.2. Data- Both inbound and outbound

15.20. Software Extension development

15.21. IT Facilities management (including provided remotely)

16. IT Enabled Servicesdo not include remote production / manufacturing units, local branches

of global businesses and virtual businesses on the Internet.

17. Electronics: The Electronics industry for the purpose of this policy means the following

categories as per classifications notified by the Department of Information Technology,

Government of India from time to time:

17.1. Consumer Electronics

17.2. Control, instrumentation and Industrial Electronics

17.3. Data processing and office equipment

17.4. Communication and broadcast equipment

17.5. Strategic Electronics

17.6. Electronic Components

17.7. Parts of Electronics components

17.8. Electronic materials

17.9. Miscellaneous items used by the Electronic industry

B. Definition of Biotechnology (BT) and Biotech Company.

1. Biotechnology encompasses any technique, which uses living organisms or parts thereof

to make or modify products, improve plant or animal productivity or to develop

microorganisms for specific use.

2. A Biotech Company means and includes inter-alia a company engaged in any of the

following activities:

Research and Development and/or manufacture of products or processes,which use or are derived by using specific living systems (plants, animals and

microbes or parts thereof) and or enzymes/ biocatalysts - derived there from.


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Genetic engineering or cell culture or microbiology or biochemistry.

Bio-informatics.3. Any other item for Information Technology, ITES and Electronics projects as well as

biotechnology, biotech companies and biotech projects as may be decided from time to

time by the committee notified above.

4. Knowledge Park for this purpose means an industrial complex which accommodates the

IT, ITES and electronics industry projects.

* Biocatalysts would mean proteins or proteinaceous molecules naturally occurring inor derived from living systems whose primary function is to assist in biochemicalreactions.

Documents

Punjab IT Policy